Zillow Group tops Q4 estimates with $789M in revenue as housing boom drives record traffic




Zillow Group CEO Wealthy Barton. (GeekWire File Photograph / Kevin Lisota)

Seattle-based Zillow Group beat analyst estimates for its fourth quarter earnings, reporting $789 million in income and non-GAAP earnings per share of $0.44. Analysts anticipated income of $740 million and earnings per share of $0.27.

Zillow on Wednesday additionally announced that it’s going to pay $500 million to accumulate ShowingTime, a Chicago-based actual property firm that sells software program to facilitate residence showings.

Zillow is benefiting from a robust U.S. housing market that gained practically $2.5 trillion in worth final 12 months, probably the most since 2005, according to the company’s analysis. Median sale costs are up 13% year-over-year, and the variety of properties bought is up 20%, according to Redfin data. Low mortgage charges coupled with robust demand and low provide are driving tailwinds for the actual property trade.

In March of final 12 months, when the way forward for actual property was up within the air, Zillow laid out a coronavirus playbook with plans to slash bills, freeze hiring, and lower advertising spend. However Zillow’s inventory value has skyrocketed since then, buying and selling at round $171/share on Thursday, up from $26/share in March. Zillow’s market capitalization has spiked to almost $40 billion.

Zillow Group’s inventory over the previous 12 months. (Google Finance screenshot)

After what CEO Wealthy Barton described as a “rollercoaster” 12 months, the corporate’s annual income ended up growing 22% from 2019, whereas general visitors hit a document 9.6 billion, up 19%.

“Many Individuals who had beforehand dreamed of shifting now have the pliability to take action, they usually flocked to Zillow in document numbers,” Barton stated in a press release. “We’re investing aggressively in new expertise and companies to assist them transfer.”

Shares had been up 7% in after-hours buying and selling Thursday following the earnings report.

In a shareholders letter, Barton stated Zillow predicts a good stronger housing market in 2021, with residence gross sales rising 21% tp 6.8 million and double-digit residence value appreciation.

“We’re constructing a seamless transaction for patrons to satisfy the need for technology-enabled renting, shopping for, promoting, and financing,” he stated.

Site visitors to Zillow’s cellular apps and web sites reached a This autumn document of 201 million common month-to-month distinctive customers, up 16% year-over-year. Complete visits reached 2.2 million, up 27%.

Income from the corporate’s Premier Agent enterprise final quarter was up 35% to $314 million, whereas income from the Mortgages section was up a whopping 190% to $60.9 million.

(Through Zillow Group shareholders letter)

Zillow’s “Houses” section, which incorporates its Zillow Gives home-buying and promoting arm, introduced in $304 million in income with a lack of $66.6 million earlier than earnings taxes. Income was down 50% year-over-year for the section as a consequence of a pause on home-buying actions earlier this 12 months. Zillow stopped Zillow Gives because the COVID-19 outbreak started however the enterprise is now lively in all 25 markets.

The corporate bought 933 properties and bought 1,789 properties, ending the quarter with 1,531 properties on its stability sheet, up from 665 final quarter.

Zillow just lately added an in-house brokerage service for Zillow Gives transactions and is increasing its Zillow Closing Providers product.

General income was down 16% from the year-ago quarter, primarily because of the slowdown with Zillow Gives.

Zillow Gives competes with corporations similar to Seattle-based Redfin and San Francisco-based Opendoor within the direct buy and sale of properties. Opendoor shares are up because it went public in December through a SPAC deal.

Zillow, which is able to have a good time its fifteenth anniversary this month, has racked up some advertising wins over the previous few months. The New York Occasions in December spotlighted the corporate as part a roundup of meals, merchandise, and different actions that individuals have turned to amid the pandemic. “No higher method to channel your despair at having to remain residence than by stalking another person’s nicer residence,” the Occasions quipped. It additionally highlighted “Zillow Browsing” in November.

“Zillow browsing has change into a main type of escapism for many who wish to flee not simply their properties however the actuality of 2020,” wrote Taylor Lorenz.

Final weekend, the corporate was the topic of a viral Saturday Night Live skit that poked enjoyable at how home-browsing on Zillow is a alternative for intercourse.

On the earnings name Wednesday, Barton additionally talked concerning the shift to distant work because it pertains to Zillow’s personal workforce. Zillow is considered one of many anchor tenants in downtown Seattle that are no longer providing revenue to nearby businesses as staff keep residence amid the pandemic.

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